Europe Taking Action on Problems

Europe is moving to deal with its problems. Greece has passed major changes in its pension system, raising the retirement age to 65 and cutting benefits. There will be a debt issuance next week.

Spain will also allow savings banks to be be be bought by private investors, including outsiders.

South Korea hiked interest rates unexpectedly, for the first time since August 2008; some are viewing it as a sign of confidence in global growth.


1) A U.S. appeals court on Thursday ruled against the Obama administration and allowed deepwater oil drilling to resume in the wake of the BP spill.

2) At a dinner in Australia, the CEO of Rio Tinto commented that China economic growth of 9 percent "is not a sustainable target" — noting that 6 percent growth in the future is more likely. However, he adds that 6 percent growth shouldn't be overlooked, as it would still be significant, given the "law of large numbers." China's GDP is expected to grow 10.5 percent this year and 9.6 percent next year.

3) Air Gas rises 1 percent after Air Products (APD) raised its offer for the second time for the industrial gas provider. In an attempt to convince the Airgas board to agree to a deal, Air Products' new offer of $63.50 in cash values Air Gas at $5.3 billion, and is $3.50/share above its original offer.

4) Commercial insurer ACE rises 5 percent after S&P announced the insurer will replace Millipore in the S&P 500. The change will be effective after the close on July 14, when Germany's Merck is expected to close its deal for Millipore. Ace, which is based in Zurich, is now eligible to go into the S&P under new rules that allow foreign companies entry into the index.

5) How much do we give you? In its first broad review of the US's financial situation, the IMF urged the U.S. to abandone the home mortgage interest deduction, cut Social Security, and increase gasoline taxes. The Obama administration agreed to allow assessments of the financial health of G-20 countries.

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